Prime Minister Mark Carney during a welcoming ceremony at the Parliament of Canada on Sept. 24, 2026 in Ottawa. Photo by Dave Chan/AFP via Getty Images

Article content

Mark Carney’s elbows-up aggressiveness appeals to all Canadians’ patriotism, but especially to the instinctive anti-Americanism of the liberal left. It also conveniently deflects from the fact that the now 38 per cent gap between the Americans’ GDP per capita and ours mainly reflects Canada’s own economic policy failures since 2015.

Article content

Canadians seem willing to accept the prime minister’s version of what led to the collapse in trade negotiations, even though they have to accept it on faith, without access to the details. They resent the deluge of demeaning insults from the White House and reject allegations that somehow Canada is taking advantage of Americans in a trade agreement President Donald Trump himself negotiated, signed and praised.

Article content

Article content

Article content

However galling all this is, we need to be hard-nosed about our interests in a vitally important but asymmetrical relationship. Canada and the U.S. are geographically inseparable and we live under the American defence umbrella. We have also benefitted enormously from trade with the richest market in the world, with which we are deeply integrated. Not surprisingly, according to the OECD, “trade uncertainty and tariffs have significantly worsened the economic outlook.”

Article content

Article content

Too many small and medium-sized businesses, which account for 64 per cent of private-sector employment, have either expanded in the U.S., delayed investment in Canada, shuttered plants here or simply gone out of business. The jobs that have been lost as a result will be difficult to replace.

Article content

There is a fundamental difference, however, between unacceptable incursions on our sovereignty and commercial concessions in the context of a comprehensive trade deal. Canada has shed blood and treasure to preserve its independence and that of others, in partnership with Americans — as we should keep reminding them. To avoid becoming a vassal state we should certainly be prepared to suffer economically. But if what is at stake is, not sovereignty, but whether a deal is acceptable commercially, then there can and should be a debate about tactics and substance, without accusations of disloyalty.

Article content

Article content

Current negotiations present very serious economic risks. Changes in CUSMA’s automotive rules of origin or in the incentives that cause manufacturers to relocate final assembly or parts production in the U.S. risk permanent loss of Canadian production. President Trump’s Section 232 tariffs of up to 50 per cent on steel, aluminum and copper and derivatives have reduced Canadian steel exports by a half, according to the Bank of Canada.

Article content

Article content

Canadian softwood lumber continues to face the long-standing U.S. anti-dumping and countervailing-duty regime. But now the U.S. has also applied a 10 per cent Section 232 tariff on softwood timber and lumber, with no CUSMA exemption. It has also imposed 50 per cent Section 338 tariffs on $27.6 billion of Canadian goods, again without exempting CUSMA-compliant products. There is no guarantee a changed Congress or even a new administration would improve matters.

Article content

We have to balance the costs of these and other measures against the enormous benefits of access to the U.S. market. It was a tactical question whether we should have walked away from talks rather than say firmly: “This does not work for us, so let’s keep talking until we arrive at a compromise that benefits both parties.” It’s not too late to take this approach, since talks apparently are continuing in the background.